Turkey foresees $20 billion renewable energy licensing in four years

In a written statement the ministry discussed the meetings which Energy Minister Taner Yıldız had in Brussels while attending the informal energy ministers meeting of the European Union on Sept. 6-7. According to the statement Yıldız told European Investment Bank (EIB) President Philippe Maystadt that Turkey would have tenders for renewable energy producing licenses, worth around $20 billion, over the course of four years and that the EIB could make substantial contributions to it. He also thanked the bank for supporting projects in Turkey, the statement said.

Turkey's soaring foreign trade deficit stems mainly from its heavy dependence on foreign supplies of oil and natural gas. According to the Turkish Statistics Institute’s (TurkStat) latest data, Turkey paid over $19 billion for oil and gas imported from abroad up until August of this year, which accounted for 19 percent of its imports and for 54 percent of its current account deficit -- which could develop into a matter of concern if the country’s balance of payments falls short of meeting its import-export requirements.

On Monday and Tuesday Yıldız had meetings in Brussels with European Commissioner for Energy Günther Oettinger, Belgian Minister for Climate and Energy Paul Magnette, managing director of the Nabucco Gas Pipeline International GmbH Reinhard Mitschek, Austrian energy group OMV Gas & Power GmbH Chairman Werner Auli and Hungarian Development Bank MFB President Tamas Fellegi.

Yıldız returned to Turkey late on Tuesday with a key agreement secured between Nabucco Gas Pipeline International GmbH and its partners -- including the Turkish Pipeline Corporation (BOTAŞ) and three financial institutions: the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC).

According to the agreement, the three leading financial institutions would provide loans of up to 4 billion euros to the Nabucco pipeline project. The two-day informal EU meeting convened in Brussels with a discussion about consumer friendly energy policies, individuals’ access to affordable energy, protection of consumers and the creation of a modern and reliable energy network in Europe.

EU has no options but to open energy chapter

Yıldız spoke to the Anatolia news agency following his meetings in Brussels and criticized the EU for dragging its feet regarding opening the energy chapter as part of accession negotiations with Turkey. He said the EU had stalled over beginning talks regarding energy for political reasons and was using the argument that there were technical obstacles to impede negotiations within the accession framework.

“Technically, we are already with Europe in terms of electricity and natural gas systems. In the field of energy, we have better facilities than most EU member states. I am saying this openly and did so during the meetings, too. For that reason, it is not right to link the failure of not opening the energy chapter in Turkey’s EU accession negotiations to technical reasons. The reasons are political only. Let me put it this way: They have to come to a point where they could heed the reserve of a small member state but also find a solution. This is not our problem but the EU’s. We discussed this matter with them, too. I think there is no option other than that we open this part of the chapter, because Turkey is now part of the solutions to the energy-related problems facing the EU members. So, this issue is not sustainable and it should certainly be resolved politically, too,” he was quoted as saying by Anatolia.

Yıldız reiterated his earlier remarks stressing the significance of the agreement signed with the EIB, the EBRD and IFC regarding financing the Nabucco pipeline project.

He said with those signatures “a phase of utmost importance” had been completed. Yıldız also told Anatolia that talks with possible supplier countries would be completed by the end of this year and that the pipeline’s construction would start in 2011. The 3,000-kilometer pipeline will pass through six countries and is expected to be operational by 2015. Yıldız earlier said the pipeline would start by carrying some 18 billion cubic meters of Azerbaijani and Iraqi natural gas to Europe by late 2014 or early 2015. The total cost of the massive project is estimated to be around 7.9 billion euros. Once enforced, Monday’s agreement would have garnered more than half of the necessary funds for it construction. The capacity of the pipeline will be 31 billion cubic meters of natural gas per year.

When asked whether Iranian gas would also flow to Europe through Nabucco, Yıldız said no potential supplier country should be excluded from providing gas. “First, we need to establish whether other countries can meet the pipeline’s capacity; if countries cannot match the capacity, then such a question may be raised again,” he explained.